Local New York City banks are a dying breed. Sovereign Bancorp Inc. bought Brooklyn's Independence Savings Bank a year ago Tuesday. More recently J.P. Morgan Chase acquired the retail branches of Bank of New York. Last year, Capital One took ever North Fork Bank. Don't forget the deal that started it all, Washington Mutual's purchase of Dime Savings seven years ago.
It's harder and harder to be a small fish amongst big sharks in New York's bank market. For a case in point, look no further than Astoria Federal Savings. Some observers such as TheStreet.com, question whether Astoria can stay solo. TheStreet.com pointed to Astoria's recent fourth consecutive disappointing earnings result, where its profit fell 31% to $41 million, or 43 cents a share — falling 2 cents short of the Thomson Financial consensus forecast. Astoria has found it hard to make a decent profit because the spread between the short-term and long-term interest rates have been narrowing.
With 86 branches and 119 ATMs located in the boroughs of Brooklyn and Queens, and the suburban New York counties of Nassau, Suffolk and Westchester, the Lake Success, N.Y.-based bank would be an attractive play for a West Coast bank such as Wells Fargo, who may want to follow Washington Mutuals' success of establishing an East Coast beachhead in New York. The San Francisco-based bank, which is the fifth-largest in America primarily with a presence west of the Mississippi River, has three branches in New York City, all in Manhattan. While Astoria's 86 branches might seem paltry, it would go a long way to improve its name recognition in the financial capital of the world.
However, Wells might have to fend off the ever present Northeastern sharks of TD Banknorth, Wachovia and Citibank, who also are other possible suitors, according to TheStreet.com. — Gerald Magpily
See TheStreet.com article
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